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Hiring

At Andreessen Horowitz, we talk about the notion of being “too hungry to eat.” That’s to say, we often see startups that are so entrenched in the product that the founders forget they need muscle to grow. Without the right people in place, it’s not easy to get to where you want to be as a company. And since recruiting the very best talent is extremely competitive, it’s important to pay maniacal attention to the entire process, and that doesn’t stop with the offer letter. Here are some important elements to keep in mind:

Aim high—much higher than you think you should. Work with your entire network (mentors, investors, customers, partners and friends) to help you identify the top 10 people in the world for the role. Try to meet every single one of them, even if they may not be looking for a new role. It helps to know what to aim for. I was surprised at how many superstars were actually very humble, approachable and culturally compatible with my team.

Don’t be cheap. If you have the money and the business is scaling, don’t shy away from using the best (and sometimes most expensive) recruiters. These recruiters will know—or unearth—the crazy-great candidates who are often stuck vesting-out at large companies. And don’t be afraid to pay market salary and equity for top talent—they are always worth it. I see many founders waste too much time trying to work their networks and/or ultimately settle for mediocre, but available candidates. You will definitely have to interview hard for cultural fit, but the best talent isn’t cheap.

Have an amazing recruiting process. This is not something you can freestyle and still expect good results. My team honed in on a specific process for recruiting that we repeated again and again. Candidates would go through two to three rounds of interviews with two to four people per round. The interview team would meet beforehand to discuss the job description, learn about the hiring manager’s hot buttons and assign interview roles (so everyone didn’t ask the same meaningless resume questions).

After each round, the hiring manager would lead a discussion and decide if the candidate ought to go to the next phase. We were prompt, organized and responsive, while making sure we over-communicated with the candidate. When it came time to make an offer, the hiring manager took the wheel completely. People leave and join companies primarily on the connection they have with their boss and negotiating the offer is the crucial start of building this relationship. I’d always want to get a handshake and eye contact with the candidate when they accepted the offer.

In addition to making sure we hired the best people, the process was a reflection of a well-run company. It allowed the candidate to meet and connect with a critical mass of our people. In the end, it made the offer feel hard earned and special.

Enlist the interview team. Once I knew when the candidate had given notice to his or her current employer, I would schedule a team dinner or drinks within 24 hours to help diffuse the pressure and to reinforce their decision. It’s also important for you and the team to keep in constant contact with the candidate during the notice period. It’s a bit weird for the hiring manager to be calling every day, but I found that a coordinated effort among the eight to 12 interviewers was not only appreciated but a pleasant surprise.

The Welcome Basket. We would put together an awesome basket of swag: t-shirts, coffee mugs, hats, Nerf guns, fruit, wine, chocolate and a handwritten note to let them know how excited we were to have them join. We’d deliver it to their home a few days after acceptance, and we’d always get an enthusiastic email or phone response. I always thought it was much harder to consider a counteroffer when our swag was strewn all over the house and their daughter was walking around in our hat and logo T-shirt.

Don’t screw up the onboarding. The first day, week and month of an employee’s experience carries a lasting impression. Everything needs to scream: “We’ve been expecting you!” You need to have business cards printed, the desk stocked with supplies, a lunch buddy schedule, basic orientation meeting and a thoughtful plan for training and beginning real, useful work. As CEO, I had a standing 30-minute meeting every Monday to greet and connect with new hires. We also had a daylong new hire orientation scheduled every quarter where I would go over the founding history, values, goals and the most recent board presentation. The product managers would go through every product and a VP would go through the organizational structure.

One of the most frustrating things I’ve experienced as a leader is putting months into recruiting an amazing VP or engineer, only to have them change their mind at the 11th hour because of a ridiculous counteroffer. This is the big risk you face when aiming for the best people on the planet (see: “Hiring Rockstars”) as they are the “beating heart” of their existing employer, and the incumbent company will often go beyond great lengths to keep them. They may be prized recruits for you, but they are absolutely the most critical people at their current employer. For instance, Google has been rumored to be especially aggressive at countering with restricted stock grants in the millions of dollars for their top people. But they aren’t alone. Any employer will do whatever he or she can to keep key talent.

We found out the hard way at IronPort by being overconfident and sloppy at the offer stage. In reality, once an offer is accepted and before the start date, candidates can still be lost—and won—in this no-man’s land. The work of getting a top recruit in the door can’t stop until they started working for us (and, even then, keeping employees excited to come to work every day never really stops). To mitigate the risk of getting left at the altar, we took a sledgehammer to this egg of a problem and came up with a systematic approach that gave us the best opportunity to close on our most prized recruits (and make them feel good about joining our organization):

Have an outstanding recruiting process. Candidates would go through 2-3 rounds of interviews at 2-4 people per round, which usually resulted in 8-12 total interviews. The interview team would meet beforehand to discuss the job description, learn about the hiring manager’s hot buttons and assign interview roles (so everyone doesn’t ask the same bullshit resume questions). After each round, the hiring manager would lead a live input discussion and decide whether to pass the candidate to the next phase. We were prompt, organized, responsive as hell and would over-communicate with the candidate. (For more insight into improving your hiring process, see Peter Levine’s blog post on hiring.) In addition to making damn good and sure that we hired the best people, the process was a reflection of a well-run company, allowed the candidate to meet and connect with a critical mass of our great people and, lastly, it made them feel like they successfully ran a gantlet to get an offer. It made the offer feel hard earned and special.

The hiring manager must control the offer process. Many companies use a recruiter or HR for managing a candidate pipeline, but when you get close to making an offer, the hiring manager needs to take the wheel completely. People leave and join companies primarily on the connection they have with their boss and negotiating the offer is the crucial start of building this relationship. There’s also a lot of critical information that can be gleaned: When will they give notice? What’s the candidate’s psyche? Who did they connect with during the interviews? I’d always want to get a handshake and an eye contact “yes” to the “Are we done-done?” question. This commitment mattered a lot during the notice process.

The Welcome Basket. We would put together an awesome basket of IronPort swag: t-shirts, coffee mugs, hats, Nerf guns, fruit, wine, chocolate and a handwritten note to let them know how excited we were to have them join. We’d deliver it to their home a few days after acceptance and we’d always get a shockingly enthusiastic email or phone response: “Wow—totally unexpected!” I always thought it was much harder to consider a counteroffer when our swag was strewn all over the house and their daughter was walking around in our hat and a baby-sized logo T-shirt.

Enlist the interview team. Once I knew when the candidate was planning to give notice, I would schedule a team dinner or drinks within 24 hours to help diffuse the pressure and reinforce the decision. It’s also important to keep in constant contact with the candidate during the notice period and the team would help there as well. It’s a little weird for the hiring manager to be calling every day, but a coordinated effort among the 8-12 interviewers was not only appreciated but unexpected.

Pay attention to onboarding. The first day, week and month of an employee’s experience carries a lasting impression. Everything needs to scream: “We’ve been expecting you!” Business cards printed, desk with supplies, lunch buddy schedule, basic orientation meeting and a thoughtful plan for training and beginning real, useful work. As CEO, I had a standing 30-minute meeting every Monday to greet and connect with new hires. We also had a daylong new hire orientation scheduled every quarter where I would go over the founding history, values, goals and the most recent board presentation. The product managers would go through every product and an available VP would go through the organizational structure.

Changing jobs is a scary, precarious proposition and the very best people have lots of options. It’s the hiring manager’s job to connect with the candidate, quarterback the process and get the candidate emotionally comfortable with the new job situation. All of this requires a ton of work AFTER the offer is presented. At the end of the day, I knew we were hiring a real rock star when we would get a “cease and desist” letter from a big public company—a last resort to prevent a beating heart from leaving their organization.

In Europe, most sports leagues participate in a system of Promotion and Relegation. At the end of each season, the top three teams in the second league get promoted to the first league and the bottom three teams in the first league get relegated to the second league. This maintains the intensity of games for low ranked teams at the end of the season, among other things. Now here’s an odd fact: the very best players only play in the first league—it’s in their contracts. If their team gets booted to the second league, these folks roll off and immediately find first-league work, typically with some of the recently promoted teams.

If you’re a newly promoted team, it’s time to augment your roster quickly in order to compete. Rockstars that were impossible to attract in the second league suddenly want a tryout. Winning in the first league is all about signing a few new superstars and integrating them effectively with your existing team.

There is a similar analogy with the talent wars at technology companies. For recruiting purposes, when a company’s metrics start to explode and they raise a significant round of capital, the company has effectively been promoted to the “first league”. When a company hits a sustained plateau or is acquired by a large public company, they get relegated to the second league. As far as talent goes, Silicon Valley is akin to 15th century Florence: the best of the best have moved here to work in technology. For all the talk about how hard it is to hire in the Valley, first-league companies can literally have their pick of the best people in the world at every function. This phenomenon is especially true of CFOs and sales VPs as these leaders are usually hired later in the company’s lifecycle and the best people can be extremely picky waiting for the right first-league company to come along.

One of the biggest mistakes I made as a CEO was not hiring these rockstars as soon as it was obvious we had been promoted. I was overly worried about the cultural fit and hegemony of the team. Specifically, after I parted ways with my first VP of engineering, I tried a number of experiments with my existing team. I promoted some director-level managers and then moved the responsibilities under another VP. Things didn’t go well and we ended up slipping a major release by nearly a year. My reluctance to bring on a “been there, done that” executive almost tanked the company.

After royally screwing this up myself, I have some hard-earned suggestions to pass along to others in this situation:

Once you have a sense that you need to make a change, start the process immediately. It almost always takes longer than you want it to (think 6-9 months, not 2-3 months)

Aim high—higher than you think you should. Work with your entire network (mentors, investors, customers, partners and friends) to help you triangulate on the top ten people in the world for the role. Try to meet every single one of them, even if they are not looking. It helps to know what to aim for. I was surprised how many superstars were actually very humble, approachable and culturally compatible with my team. This was not my going-in assumption.

Don’t be cheap. Use great recruiters who will know—or unearth—the crazy-great candidates who are often stuck vesting out at larger (second-league) companies.

Interview the hell out of them. When we were adding members to the executive team, we did 20+ interviews with the finalists. That process included lunches, dinners and drinks. The very best need to be pushed back on their heels a little bit, not just sold.

Make the time to integrate the new executive a priority. I learned (through several mistakes) that as the CEO, I needed to be all over making the new person successful during their first few months. Plan on being in the office, actively managing introductions and role definitions, checking in with peers and coaching the group toward success. Don’t do it alone—the whole executive team should actively participate.

I sent a draft of this post to a first-league CEO who is grappling with this exact situation and he asked some very relevant questions. I’ve answered them here:

Q: When do you know which existing players don’t make the cut any longer?
A: If there’s some reasonable doubt about anyone’s ability to scale, you are probably right and you have an obligation to go meet some rockstars to compare. Few CEOs ever say: I was too fast in making a key change with an existing player. I certainly waited too long on several occasions.

Q: Do some players deserve the chance to keep playing in their current role because of history, dedication, effort and loyalty?
A: I’m all for keeping hardworking, dedicated and loyal employees on the team, but they may need to be coached into a different role that is more suited for their abilities. I think every CEO knows who’s beyond-a-reasonable doubt in their roles. If there are people on the fence, then you need to start scouting.

Q: When is it appropriate to bring in rockstars underneath existing execs that are not scaling to help make them successful?
A: Very rare occasions when the existing exec has outrageous strengths that give you confidence they can make it over the hump. Is the existing exec special enough to get a few rockstars interested in reporting to him? That’s a good test.

Q: Clearly this logic, taken to the extreme, without any qualifying criteria, would leave you shuffling your entire organization, is that what you are suggesting?
A: I hate to keep coming back to the sports analogy but if you are playing in the NBA, then you have an obligation as a coach to put the best talent you can find on the court. That said, running a business is a team sport so team chemistry is crucial and you also need role players. But talent is talent and if you are overly loyal to players who don’t have the skills to compete in the first league, then you will put your company at a disadvantage. It’s a balance.

Q: Finally, once you get to the ‘premiere’ level, how do you separate the ‘mercenaries’ from the big league people who want to play for real with you?
A: This is a big risk that is mitigated by interviewing and reference-checking. This was one of my biggest fears that I later came to believe was unfounded.